Research suggests written financial, income, and tax savings plans help you achieve your retirement goals.
The concrete benefits for individuals of having a written retirement plan are clear, according to a Hearts & Wallets survey of 5,794 U.S. Households.
The research shows that Americans who have a retirement plan enjoy increased savings, better asset allocation, more confidence in financial decision making and more balanced portfolios, along with SWAN. Especially when it comes to asset allocation, those with a plan avoid extremes in cash, market timing, and equity allocations observed among households that don’t have a plan.
More than half of households with written plans save 10% of their income verses 36% of those who wing it.1 That confidence and understanding of money and markets can help clients remain calmer during volatile markets.
According to the research, “The Power of Planning: Proven Benefits That Transform Consumer Financial Outcomes,” four of five U.S. households (82%) say they think about working toward long-term financial goals, with half (54%) having a plan. However, only one-third of households with plans report having written plans.
Americans with a written plan save more across all income levels. More than half (52%) of households with written plans save 10% of income or more versus 36% of households with unwritten plans. For households that think about goals but don’t have a plan, the most common behavior is to save modestly at 1% to 5% of income (29%) and about one in four do not save at all.
Take Control of Your Future
Retirement planning is an important decision for anyone who wants to secure their financial future. Making the right retirement plans can provide a wide range of benefits, from feeling more secure and in control of your finances, to being able to enjoy retirement without worrying about insufficient savings.
Retirement planning also takes into consideration numerous factors such as tax benefits and inflation, helping you make sure you will have enough funds to lead a comfortable life during retirement. All in all, taking the time to carefully plan for retirement can bring peace of mind and ensure that you are well set up for deciding what comes next.
So, what’s actually in a comprehensive retirement plan? Here’s an overview of the 6 areas that are covered.
To be more specific, a comprehensive retirement plan makes you in charge of all areas of your financial life. Here are several checklists.
After the checklists, here is a sample of the results you achieve.
SnapShot
If you would like to take charge of your financial life and receive your personalized retirement plan to achieve SWAN (Sleep Well At Night). Please contact us at info@commonfinancialsense.com
Until Next Time…
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Disclosures
1 Having a Written Financial Plan Improves Savings and Asset Allocation, PlanSponsor.com, February 8, 2022.
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